monthly sales. If the sales manager is right‚ what will be the effect on the company’s monthly net operating income or loss? (Use the incremental approach in preparing your answer.) Requirement 2 (continued) Incremental method Variable expense ($14 per unit) Contribution Margin $340‚000 Sales increased 238‚000 VE increased 102‚000 CM increased Fixed Expenses 98‚000 Net Operating Income $4‚000 Sales (17000 units x 20) $70‚000/20 = 3500 units $189‚000/13500 = $14 per unit $90‚000 + 8‚000= $98
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record‚ classify‚ report‚ and interpret financial data. The accrual concepts states that accounting income is measured by matching the expenses incurred in a given accounting period with the revenues earned in that period. The accounting cycle is 6 steps. The accounting cycle is a logical series of steps that accountants follow to keep necessary accounting records and prepare financial statements. The first two steps are very closely related and are accomplished during the month as transactions
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provided in the case‚ we set up new income statement for 2003‚ 2004 and 2006 (see exhibit a). The variable cost includes cost of good sold and commissions‚ and the fixed cost cover other things include selling expense‚ salaries‚ advertising‚ administrative expenses‚ rent‚ depreciation‚ and miscellaneous expenses. Then the brief result shows in the table below. 2003 2004 2006 Break-even point in dollars (in thousand of dollars) = Fixed cost/contribution margin ratio $7‚287.03 $7‚620.20
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000 515‚000 8% Service costs Prior service costs amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets Instructions: (a) Prepare a pension worksheet for the pension plan for 2012 and 2013. HARRINGTON COMPANY Pension Worksheet—2012 and 2013 General Journal Entries Items Balance‚ Jan. 1‚ 2012 (a) Service cost (b) Interest cost (c) Actual return (d) Contributions (e) Benefits Journal entry‚ 12/31/12 Accum OCI‚ 12/31/11 Balance
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deals with disclosure of Accounting Principles and policies used for preparation of financial statements of the companies. 2. AS 2: Valuation of Inventories- * It deals with determination of amount of inventory to be shown in financial statements. It is not applicable to shares‚ debentures‚ stock etc. The cost formulae prescribed are FIFO‚ weighted average. 3. AS 3: Cash Flow Statements- * It standard requires companies to report cash generation and utilization. Cash flow is
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alone‚ Office Depot generated $10.7 billion of revenues from its products and services‚ yet industry reviews of this company seem unfavorable. In this FSA Case Analysis‚ our team takes a careful look at Office Depot’s most recent financial statements; and‚ using the FSA spreadsheet‚ performs an internal environment analysis of its liquidity‚ solvency‚ operating efficiency and capital structure. In order to make the analysis complete‚ prior period reported information is compared with the latest
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on A. B. C. D. E. dividend policy. investment theory. working capital management. capital structure theory. supply chain theory. 4. Professors Harry Markowitz and William Sharpe received their Nobel prize in economics for their contributions to the A. B. C. D. E. options pricing model. theories of working capital management. theories of risk-return and portfolio theory. theories of international capital budgeting. capital structure theory. 5. Proper risk-return management
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that took place during the month of March. It also shows how each cast transactions affects the accounting equation and an additional piece of information that is related to the transaction other than the financial statements. In addition‚ it includes the four basic financial statements for the month of March. The Business of Accounting D.C. Dawg has just started a business in March called Cats and Dogs Company. These are the cash transactions that has occurred during this month: it contributed
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followed the CAP. Asset/liability approach With the asset/liability approach‚ recognition and measurement of assets and liabilities drives revenue and expense recognition. Auditors Auditors express an opinion on the compliance of financial statements with GAAP. Capital markets The capital markets provide a mechanism to help our economy allocate resources efficiently. Certified public accountants (CPAs) Certified public accountants (CPAs) are licensed by states to provide audit services
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Problem 12- 6 Statement of — Direct Method The income statement for Astro Inc. for 2010 is as follows: For the Year Ended December 31‚ 2010 Sales revenue $ 500‚000 Cost of goods sold 400‚000 Gross profit $ 100‚000 Operating expenses 180‚000 Loss before interest and taxes $ ( 80‚000) Interest expense 20‚000 Net loss $( 100‚000) Presented here are comparative balance sheets: December 31 2010 2009 Cash $ 95‚000 $ 80
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